Stayed in China

Yesterday, Reuters reported that China has proposed export controls on twelve technologies used to manufacture solar panels.¹ The restrictions target some of the most advanced processes in the industry, from high-efficiency »tandem cells« that stack several light-absorbing layers on top of each other, to the production of ultra-thin silicon wafers. The planned regulations aren’t about the finished panels: China wants to control the means of making them.

»The sun is free. The means of catching its rays is not«

That’s an important distinction. Other countries can of course buy solar panels from China and use them to generate their own electricity. China’s idea is to limit the possibility for countries to buy the knowledge required to build the machinery that makes them. The proposed rules go further than paperwork and parts: helping build a factory abroad, switching it on, and keeping it running all count as exporting the technology itself. A Chinese engineer sent out to such a factory might carry a particular kind of expertise, one that can’t be packed into a shipping container.

Michael Polanyi, a chemist turned philosopher of science, called this tacit knowledge. »We can know more than we can tell«, he wrote in The Tacit Dimension.² You can read instructions for riding a bicycle, but those instructions can’t teach you how to find your balance. A process may be documented down to the smallest parameter, yet still require someone who knows what to do when it misbehaves.

That’s what makes China’s announcement more consequential than just another trade dispute. Renewable energy was supposed to free us from a very old kind of politics – the fighting about who gets to control the wells, the pipelines, and the chokepoints: the recent dispute over the Hormuz Strait is a textbook example. But the dependency didn’t disappear so much as climb up the supply chain. The sun is free. The means of catching its rays is not. According to Bernreuter Research, China produced 93.5 per cent of the world’s polysilicon in 2024, the ultra-pure form of silicon that’s the starting material for almost all solar cells.³ Now the country wants to keep some of the knowledge that got it there to itself.

Elsewhere, countries chasing the same capability are discovering just how hard it is to close the gap between buying a technology and knowing how to run it. India has built an enormous solar-module assembly capacity, but its cell-production capacity remains far smaller – they have the panels without the knowledge. The United States has reached for a different lever: tariffs and a price floor on imported polysilicon. But a tariff fixes a price, not a skill, and America’s own know-how in making this material has been sitting idle for years.

Philosopher Ivan Illich had a name for this kind of trap: a »radical monopoly«.⁴ Not a company dominating a market – any company can do that – but when a way of doing something becomes so entrenched that other ways quietly stop being viable, even if no one decided to shut them down. On paper, a factory that assembles imported solar cells into finished panels counts as domestic manufacturing. But it teaches a country nothing about how to make the next generation of cells, and the longer an economy is built around assembling rather than inventing, the harder it becomes to even attempt inventing something new.

Economist Albert Hirschman argued that trade creates power whenever one country depends on another more than the other way round.⁵ That power doesn’t have to be used to matter, but one way it gets used is to make sure a dependent country never stops depending. Sweden’s Nordcell Group tried to build a solar factory of its own, and scrapped it last November when, as co-founder Vahid Toosi put it, Chinese manufacturers were selling into Europe at roughly half what it cost Nordcell to produce the same panels. »That’s classic dumping,« he said.⁶ Dumping isn’t just unfair competition: it’s a way of keeping a would-be rival dependent before it ever gets off the ground.

There’s a counterargument. Knowledge travels. Polanyi’s point was not that tacit knowledge is secret forever, only that it can’t be reduced to a set of instructions and transferred at will. The gap isn’t permanent. But it won’t close just because someone pays for it to close.

China’s advantage was earned rather than given: it first imported and then refined the knowledge it now wants to keep. You can buy the machine. You can buy the plans. You can even buy the person who knows how to switch on the factory. What you can’t buy is knowing how to do it yourself – that part you have to learn, and then, perhaps, protect.

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